GlobeNewswire Inc | Nov 8, 2021 04:01PM EST

November 08, 2021

VALENCIA, Calif. and MELBOURNE, Australia, Nov. 08, 2021 (GLOBE NEWSWIRE) -- AVITA Medical, Inc. (NASDAQ: RCEL, ASX:AVH) (the Company), a regenerative medicine company that is developing and commercializing a technology platform that enables point-of-care autologous skin restoration for multiple unmet needs, today reported financial results for its first fiscal quarter ended September 30, 2021.

First Quarter Fiscal Year 2022 Highlights

-- Total revenue increased 39% to $7.0 million compared to $5.1 million in the first fiscal quarter of 2021 -- Gross profit margin improved 3% to 85% compared to the first fiscal quarter of 2021 -- Total operating expenses decreased 18% to $12.3 million compared to $14.9 million in the first fiscal quarter of 2021 -- Net loss of $5.9 million, or $0.24 per share compared to a net loss of $10.2 million, or $0.48 per share in the first fiscal quarter of 2021 -- As of September 30, 2021, the Company had $60.4 million in cash and cash equivalents and $49.5 million in short-term and long-term marketable securities, and no debt

I am pleased with the progress we made in the overall business this quarter, despite the hospital staffing shortages that impeded RECELL usage in burn procedures, said Dr. Mike Perry, AVITA Medical Chief Executive Officer. We saw continued acceleration of enrollment into our soft tissue reconstruction trial, which is now close to completion with 58 of 65 subjects. We look forward to expanding into this $450 million serviceable addressable market upon approval, beginning with our existing burn center accounts and leveraging our new TPT code in the outpatient setting.

First Quarter of Fiscal Year 2022 Financial ResultsTotal revenue for the three months ended September 30, 2021, was $7.0 million, an increase of $2.0 million or 39% over the $5.1 million reported for the same period in 2020. The increase was largely driven by broader utilization among our customer base as well as deeper penetration within individual customer accounts.

Gross profit margin for the three months ended September 30, 2021, was 85% compared to 82% reported for the same period in 2020. Higher gross margin was driven by lower shipping costs and increased production at our Ventura facility.

Total operating expenses for the three months ended September 30, 2021, was $12.3 million, a decrease of $2.7 million or 18% over the $14.9 million reported for the same period in 2020. The decrease in operating expenses is primarily attributable to lower stock-based compensation and higher costs in the prior year related to the Avita groups redomiciliation to the United States, along with severance costs associated with a former executive. This was partially offset with higher travel costs in the current year due to fewer COVID-19 related travel restrictions. Net loss for the three months ended September 30, 2021 was $5.9million, a decrease of $4.3million, or 42%, over the $10.2million loss recognized during the same period last year. The decrease in net loss was driven by the lower operating expenses described above and the higher revenue during the three months ended September 30, 2021.

Second Quarter of Fiscal Year 2022 Revenue Guidance

-- Total revenue is expected to be approximately $7.0 million. This guidance reflects the anticipated impact of hospital staffing challenges as well uncertainty with the pandemic.

Webcast and Conference Call InformationThe Company will host a conference call to discuss the first quarter financial results after market close on Monday, November 8, 2021, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time (being 8.30 a.m. Australian Eastern Daylight Time on Tuesday, November 9, 2021). The conference call can be accessed live over the phone at (833) 614-1538 for U.S. callers or at (706) 634-6548 international callers, using conference ID:2592487. The live webinar can be accessed at https://ir.avitamedical.com.

Authorized for release by the Chief Financial Officer of AVITA Medical, Inc.

ABOUT AVITA Medical, Inc.AVITA Medical, Inc. is a regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indications. AVITA Medical Inc. patented and proprietary collection and application technology provides innovative treatment solutions derived from the regenerative properties of a patients own skin. The medical devices work by preparing a RES REGENERATIVE EPIDERMAL SUSPENSION, an autologous suspension comprised of the patients skin cells necessary to regenerate natural healthy epidermis. This autologous suspension is then sprayed onto the areas of the patient requiring treatment.

AVITA Medicals first U.S. product, the RECELL System, was approved by the U.S. Food and Drug Administration (FDA) in September 2018. The RECELL System is approved for acute partial-thickness thermal burn wounds in patients 18 years of age and older or application in combination with meshed autografting for acute full-thickness thermal burn wounds in pediatric and adult patients. The RECELL System is used to prepare Spray-On Skin Cells using a small amount of a patients own skin, providing a new way to treat severe burns, while significantly reducing the amount of donor skin required. The RECELL System is designed to be used at the point of care alone or in combination with autografts depending on the depth of the burn injury. Compelling data from randomized, controlled clinical trials conducted at major U.S. burn centers and real-world use in more than 8,000 patients globally, reinforce that the RECELL System is a significant advancement over the current standard of care for burn patients and offers benefits in clinical outcomes and cost savings. Healthcare professionals should read the INSTRUCTIONS FOR USE - RECELL Autologous Cell Harvesting Device ( https://recellsystem.com/) for a full description of indications for use and important safety information including contraindications, warnings, and precautions.

In international markets, our products are marketed under the RECELL System brand to promote skin healing in a wide range of applications including burns, chronic wounds, and aesthetics. The RECELL System is TGA-registered in Australia and received CE-mark approval in Europe.

To learn more, visit www.avitamedical.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as anticipate, expect, intend, could, may, will, believe, estimate, look forward, forecast, goal, target, project, continue, outlook, guidance, future, other words of similar meaning and the use of future dates. Forward-looking statements in this press release include, but are not limited to, statements concerning, among other things, our ongoing clinical trials and product development activities, regulatory approval of our products, the potential for future growth in our business, and our ability to achieve our key strategic, operational, and financial goals. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward- looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the timing of regulatory approvals of our products; physician acceptance, endorsement, and use of our products; failure to achieve the anticipated benefits from approval of our products; the effect of regulatory actions; product liability claims; risks associated with international operations and expansion; and other business effects, including the effects of industry, economic or political conditions including, but not limited to the ongoing COVID-19 pandemic which are outside of the companys control. Investors should not place considerable reliance on the forward-looking statements contained in this press release. Investors are encouraged to read our publicly available filings for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.

FOR FURTHER INFORMATION:

U.S. MediaSam Brown, Inc.Christy CurranPhone +1 615 414 8668 Investorschristycurran@sambrown.com ICR Westwicke Caroline CornerO.U.S Media Phone +1 415 202 5678Monsoon Communications caroline.corner@westwicke.comRudi MichelsonPhone +61 (0)3 9620 3333Mobile +61 (0)411 402 737rudim@monsoon.com.au

AVITA MEDICAL, INC.Consolidated Balance Sheets(In thousands, except share and per share data)(Unaudited)

As of September 30, June 30, 2021 2021ASSETS Cash and cash equivalents $ 60,484 $ 110,746 Marketable securities 29,703 - Accounts receivable, net 3,118 3,467 BARDA receivables 603 3,936 Prepaids and other current assets 1,129 1,333 Restricted cash 201 201 Inventory 1,892 1,647 Total current assets 97,130 121,330 Marketable securities, long-term 19,801 Plant and equipment, net 1,357 1,458 Operating lease right-of-use assets 1,710 1,480 Intangible assets, net 472 472 Other long-term assets 703 761 Total assets $ 121,173 $ 125,501 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued liabilities 2,439 3,120 Accrued wages and fringe benefits 3,663 3,321 Other current liabilities 951 949 Total current liabilities 7,053 7,390 Contract liabilities 1,018 1,075 Operating lease liabilities, long term 1,107 878 Other long-term liabilities 503 503 Total liabilities 9,681 9,846 Contingencies (Note 10) Shareholders' Equity: Common stock, $0.0001 par value per share,200,000,000 shares authorized, 24,925,118and 24,895,864 shares issued and 3 3 outstanding at September 30, 2021 and June30, 2021, respectivelyPreferred stock, $0.0001 par value pershare, 10,000,000 shares authorized, no - - shares issued or outstanding at September30, 2021 and June 30, 2021Additional paid-in capital 330,734 328,889 Accumulated other comprehensive income 8,199 8,259 Accumulated deficit (227,444 ) (221,496 )Total shareholders' equity 111,492 115,655 Total liabilities and shareholders' equity $ 121,173 $ 125,501 The accompanying notes form part of the consolidated financial statements

AVITA MEDICAL, INC.Consolidated Statements of Operations(In thousands, except share and per share data)(Unaudited)

Three Months Ended September 30, 2021 2020 Revenues $ 7,020 $ 5,060 Cost of sales (1,088 ) (929 )Gross profit 5,932 4,131 BARDA income 374 596 Operating expenses: Sales and marketing expenses ^(1) (3,518 ) (3,265 )General and administrative expenses^ (5,349 ) (8,302 )(1)Research and development expenses ^(1) (3,388 ) (3,374 )Total operating expenses (12,255 ) (14,941 )Operating loss (5,949 ) (10,214 )Interest expense (9 ) (7 )Other income 16 4 Loss before income taxes (5,942 ) (10,217 )Income tax expense (6 ) (10 )Net loss $ (5,948 ) $ (10,227 )Net loss per common share: Basic $ (0.24 ) $ (0.48 )Diluted $ (0.24 ) $ (0.48 )Weighted-average common shares: Basic 24,905,403 21,503,643 Diluted 24,905,403 21,503,643

(1)Total operating expenses include impact of share-based compensation as follows:

Three-months ended September 30, 2021 2020Sales andmarketing $ 291 $ 330expensesGeneral and administrative 1,251 2,766expensesResearch and development 300 170expensesTotal $ 1,842 $ 3,266